Georgetown Law Professor Chris Brummer talks Fintech with PayPal CEO

Georgetown Law Professor Chris Brummer, faculty director of the Institute of International Economic Law (IIEL), sat down with PayPal CEO Daniel Schulman on Capitol Hill last month to discuss the future of digital commerce, fintech and financial inclusion.

The interview explored new commercial and regulatory developments spanning different sectors of the economy, including the profound transformation wrought by mobile technology on the retail industry. Malls and shopping centers will continue to face massive disruption by online shoppers, Schulman said, and the future of retail will be similar to that in Asia now — an environment free of carts and sales lines, where shoppers use their phones to tag desired goods that are quickly delivered to people’s homes. In the process, stores will increasingly comprise, and morph into, miniature logistics operations.

Schulman also predicted that the offline and online components of commerce will blur as algorithms compile data to allow more bespoke products and services. But for all of the wonderful new services for consumers, data-based competition will create higher barriers to entry for young companies in retail — just as increasingly powerful technology firms disrupt incumbent old-line retailers. The key to competition in these areas will thus involve the degree to which, and how, first-in-time disrupters make accessible the data harvested from their operations to emerging companies and entrepreneurs.

Other topics on the table included how fintech (financial technologies) can and should improve financial inclusion; the continued need to eradicate banking deserts; and the need to better coordinate and launch public-private partnerships. PayPal operates in a $100 trillion industry with approximately 1 percent market share and 210 million users, yet there are still nearly 2 billion people around the world who live outside financial mainstream. Schulman praised efforts by regulators to better understand emerging technologies and concluded that if tech is to achieve its full objective, its increasingly critical role in society will have to be driven by, and evaluated by, the moral objective of doing good while doing well.

“As the head of the world’s leading online payments firm, Dan has unique insight into not just the direction of retail commerce, but also how consumers and market participants are interfacing in real time,” Brummer noted. “No one is better situated to see emerging trends set to disrupt retail commerce as we know it.”

The interview is the latest in Georgetown’s expanding fintech programming at IIEL, a leading global forum for interdisciplinary academic and policy research. In addition to the Institute’s first annual Fintech Week, where Georgetown hosted high level government, legal and financial experts alongside leading technologists, IIEL has held a variety of forums and discussions with entrepreneurs and policymakers. Most recently, the head of the CFTC’s financial innovation program penned an IIEL Issue Brief on his agency’s new fintech engagement agenda.